May 14, 2013 - 7:37pm

For those serious about long term outcomes in carbon and clean energy, the Budget’s cuts and deferrals show the importance of target driven markets for more certain outcomes, said The Climate Institute tonight.

“This Budget makes cuts or deferrals to renewable energy and low carbon solutions, misses a key opportunity to wind back fossil fuel subsidies and appears to under-invest in global solutions,” said John Connor, CEO of The Climate Institute. “Such hits and misses are a stark reminder that target driven carbon and clean energy markets take us outside these budget shenanigans. An over reliance on the purse strings does not provide policy stability.”

“These are the principal policies that can help either the Government or Opposition meet the full range of their bipartisan carbon pollution reduction targets of 5 to 25 per cent below 2000 levels by 2020 and continue the transformation of our energy sector with an extra 41,000 Gw hours of renewable energy by 2020.”

“Public funding is important, however, and can help frustrate or boost investment in low carbon alternatives and engagement in global solutions.”

“The deferral of $370 million investment in the Australian Renewable Energy Agency and almost $600 million cuts to Low Carbon Communities and carbon capture and storage initiatives are regrettable.”

“There is also a huge missed opportunity for taxpayers to stop subsidising fossil fuels by failing to cut back the over $5 billion per annum diesel fuel rebate scheme.”

“The drop in the 2015/16 estimated carbon price to around $12 and the estimate of around $40 in 2020 is broadly in line with current market expectations but should be understood as carbon markets emerge in China, South Korea, California and elsewhere over that time.”

“The resulting deferred tax reduction highlights the importance of an independent review mechanism to ensure support for low income families remains appropriate, as it has been through the first year of the carbon laws.”

“The budget has deferred overseas aid increases and signalled a decline in funding for the program area from which support for neighbouring developing countries to prepare for climate impacts comes.”

“This would be against our economic interest not only because these countries are key emerging trading partners but also because such support is crucial to helping reach a global agreement with all major emitters. We have committed to scale up such commitments and should be investing around $350 million per year.”

“We look forward to the Coalition’s budget in reply to confirm whether they are still committed to the $3.2 billion of public funding over the forward estimates for their Emissions Reduction Fund and the levels of carbon penalties they will apply to business,” concluded Connor.